Kimco in the news: Q4 2016 recap
As the year came to an end, Kimco continued to remain busy throughout its fourth quarter—both in the real estate world and in the news. While the business of real estate may continue to shift around us, the company continues to prove that not only can it take on these challenges, but also adapt, grow, and thrive in the midst of change.
Here are some of the top media hits from Q4.
What’s trending now
President and CEO Conor Flynn appeared on CNBC’s Power Lunch to discuss retail health before the holiday shopping season and the strength of our portfolio. According to Conor, retailers are becoming more nimble and adapting to smaller stores to get into difficult-to-penetrate urban areas, with Target’s flex format store a perfect example. In the October issue of The Real Deal, Conor spoke on REITs becoming a new category within the Global Industry Classification Standard, and on the property types most attractive to Kimco.
He noted, “Grocery-anchored centers…are the most attractive, as you can redevelop and add density and take advantage of the growing population by creating a vibrant shopping experience, with the potential for mixed use.”
Commercial real estate is still going strong on many fronts, and these thoughts have been reiterated throughout the media as the year closed. A 38-year low in new shopping center supply has created pricing power for retail landlords like ourselves, and off-price retailers are still driving the market cap in the retail sector. Kimco made headlines with its acquisition of the remaining share of Oakwood Plaza, which was named one of Florida’s top 10 real estate deals.
Kimco’s president of the northeastern region, Joshua Weinkranz, spoke to NJ.com on how big-box retailers like Sports Authority filing for bankruptcy aren’t necessarily a cause for concern. It allows owners to diversify into mixed-use projects, which are a draw for other retailers. As he explained at a recent Long Island Real Estate Group event, large vacancies are presenting opportunities for retailers looking to break into a specific market, with boutique fitness clubs, restaurants, and walk-in medical clinics becoming “the next hot thing.”
In other cases, Kimco helped bring several high-profile tenants to new places, including Hobby Lobby’s first Long Island location, and Weis’s expansion into the Baltimore area. Fast-growing Orchard Supply Hardware signed its first Miami-area lease in our Coral Way Plaza, filling a former Staples space. Despite small uptick in vacancies this year in the market, the many changes made in big-box retail and the re-purposing of several spaces has enabled the anchor occupancy rate in our portfolio to remain over 97 percent.
An additional opportunity for filling vacancies is the expanded interest of online retailers to make the move to brick-and-mortar. Kimco helped facilitate this “click-to-bricks” trend when its Shops at Kildeer became the home to one of Lumen’s new stores, bringing the eyewear provider into a physical space.
Award-winning business sense
Kimco’s president and CEO, Conor Flynn, and former president and CEO, David Henry, both received awards this quarter.
Conor Flynn won an honorable mention for Commercial Property Executive’s Retail Property Executive of the Year award, exemplifying “fearless leadership that the entire industry can emulate.”
David Henry received the Edward H. Linde Industry Award in Leadership at REITWorld 2016. The award honors a REIT executive who has made a significant and lasting contribution to the growth and betterment of the industry. Specifically highlighted were his efforts in taking the REIT story to policymakers on Capitol Hill. When asked about the future of REITs, Henry said that he expects the industry to continue growing, while keeping an eye on rising rates and potential tax reform. But he “thinks it will only affect the industry around the edges.”
In other headline-making news, Kimco is serving on the inaugural advisory board for the new Landlord-Tenant Energy Partnership. This new program is an effort to reduce energy use in retail and commercial real estate, and was established by the Institute for Market Transformation (IMT), the Retail Industry Leaders Association (RILA), and the International Council of Shopping Centers (ICSC).
Redevelopment is essential to refining our real estate portfolio, and Chain Store Age named us one of America’s Top 10 Redevelopers.
In Houston, Texas, Kimco continues developing two new shopping centers: Grand Parkway Marketplaces I and II. The first center, anchored by Target, is slated to begin opening stores March of 2017, and was over 70 percent leased by December. Recent lease signings include Bath & Body Works, Chipotle, Orangetheory Fitness, and DSW. Kimco’s announcement of a Grand Parkway Marketplace II—with three anchor stores—across the street was greeted with enthusiasm from the community. Hobby Lobby and Academy Sports + Outdoors have already signed on for two of the anchor spots. Construction for Grand Parkway Marketplace II kicks off this month.
We’ll see you again in April for more Kimco media coverage.